CFPB Screws the Pooch. Well, Farmers

[cbelt3]

http://www.cleveland.com/open/index.ssf/...rt_m-rpt-2

"But that seems to have escaped Washington regulators who want to restrict mortgage-writing standards in these and other counties, small-town bankers say. In a matter that has many wondering how bureaucrats can be so disconnected from real-life Ohio, the Consumer Financial Protection Bureau is defining "rural" to exclude most of rural Ohio.

Ohio, for example, has 88 counties. Most methods of counting, including those used by the state, the U.S. Census Bureau and other government agencies, come up with 48 of them as rural. The CFPB, however, is only counting 20.

"

Remember that most farmers (no, not your yammered about evil Agro business... small farms still exist !) rely on annual mortgage type loans based on expected crop yield in order to buy seed, plant, and operate until the crops come in. Most of these are not 'qualified mortgages' because, well, farming isn't a 'regular income' business.

The vaunted CFPB is about to 'protect' small farmers OUT of business. And guess who benefits ?

Yup. Your epic evil bad massive agro-business combines. The Darth Vaders of corn and beans.

Is this just bureaucratic stupidity, or is the fix in in the Obama administration ?

[Lemon Drop]

Back in the 80's before all he-double hockey sticks broke lose in the mortgage business, I used to work in small business financing (for a Bank of America predecessor company) and helped a lot of farmers.

Both small community banks (those that make 5,000 or fewer loans per year) and the Farm Credit System are mostly exempt from the new CFPB regulations. Those are the sources of loans for most small farmers, so I just don't see them needing to worry a lot about these new regs.

http://cfpbjournal.com/issue/cfpb-journa...dit-system

Those big banks DO have a lot of new regs and they need it. Big banks are mad that they will have cumbersome paperwork requirements from which the other guys are exempt, which they think will give smaller banks additional price competition advantages. So they are very unhappy about CFPB and I wonder if that's the source of this report you quoted?

I really don't know what the deal is with this county rural designation thing but I do know that CFPB is not designed to hammer either small farm lending or small community banks.

[cbelt3]

Lemon-

Thanks for sharing your expertise. The Cleveland.com article mentioned the same people referred to as being 'exempt' in your 2 years old article. I wonder if things have changed ?

I do agree that the CFPB was intended to help people and reduce predatory lending practices. But we both know where roads lead when you begin paving with good intentions and poor guidance.

My posting this is merely an expression of concern. We all know what happens in D.C. when lobbyists get ahold of laws that mean well, but can be perverted for Bad Stuff.

[Lemon Drop]

i totally get that and I'm not a fan of making life hard for small businesses or farms, in any way. I just don't think that there is a goal of interfering with any healthy lending practices, and if there's a bump it can be corrected.
Elizabeth Warren is nobody's fool and if anybody is the opposite of bureaucratic pawn, it's her.